This month’s meeting will take place Monday 5th November, at 8pm London time. That’ll be midday in Vancouver and 9pm in Berlin. Join the Facebook event here. For more information about the Health Economics Twitter Journal Club and how to take part, click here.
“Moral hazard and supplier-induced demand: empirical evidence in general practice”
Following the meeting, a transcript of the discussion can be downloaded here.
Links to the article
Summary of the paper
Supplier-induced demand and ex-post moral hazard are key issues in the study of health economics. In this study the authors utilise a change in the remuneration system in the Netherlands in 2006 to see if these dynamics could be observed. Cost sharing was abolished for consumers with private insurance, whose care was paid for on a fee-for-service basis, while socially insured consumers, whose care was paid for through capitation, never faced cost sharing. The system was changed such that both groups of consumers’ remuneration systems became a combined system of capitation and fee-for-service; altering the financial incentives of consumers and GPs. The authors hypothesise that privately insured consumers had a greater increase in the rate of patient-initiated GP contacts compared with the socially insured consumers. Furthermore it was hypothesised that socially insured consumers would experience a higher increase in physician-initiated contact rates. Electronic medical records were obtained from 32 GP practices and 35336 consumers in 2005-2007. The authors utilise difference-in-difference analysis to study the effect of the system changes on GP contact rates. The study finds that the abolition of cost sharing led to a higher increase in patient-initiated utilisation for privately insured consumers aged 65 or older. The introduction of a fee-for-service system for socially insured consumers resulted in a higher increase in physician-initiated contacts, and was most apparent in individuals aged 25 to 54. Differences in the trend in physician-initiated utilisation suggest an effect of supplier-induced demand. Differences in patient-initiated utilisation indicated limited evidence for moral hazard.
- Are the authors’ assumptions reasonable and justified?
- Are the econometric methods sound or could they be improved?
- Does the model suffer from any endogeneity problems?
- Can the results be generalised to other populations and systems?
Missed the meeting? Add your thoughts on the paper in the comments below.